Alex Vynokur
BetaShares, a leading Australian manager of exchange traded products, has announced the launch of the BetaShares Managed Risk Australian Share Fund (managed fund), which is trading under the ASX code “AUST”.
The Fund provides investors with cost-effective exposure to a diversified basket of Australian shares, along with the potential for reduced downside in declining markets.
The Fund’s investment strategy is to invest in a passively managed basket of Australian shares (generally consisting of approximately 200 of the largest shares on the ASX by market capitalisation), providing investors with the opportunity for capital growth and income. In addition, the Fund will employ an active risk management strategy, which seeks to reduce volatility and defend against losses in declining markets.
While the Fund is expected to have broad application and be suitable for a variety of investors, it has been specifically designed to meet the needs of SMSFs, pre-retirees and retiree investors, who are seeking equity exposure but who may be concerned about uncertain financial markets.
BetaShares Managing Director, Alex Vynokur, said: “Investors and their advisers are increasingly being made aware of a major investment challenge – invest too cautiously and risk insufficient investment performance required to fund lifestyle purposes; invest too aggressively and risk exposure to significant losses in a market decline.
“Particularly in a low interest rate environment, the potential performance and income benefits of investing in shares are attractive to investors. However, investors may be concerned about the effects of volatility and potential losses when markets fall, particularly in the current environment, where the volatility of the S&P/ASX 200 has risen to its highest level since 2011.
“To address this, the Fund’s risk management strategy actively monitors sharemarket volatility and, when volatility rises, applies a handbrake to reduce the impact of major market declines. It does this by reducing investors’ exposure to equities in falling markets, while still allowing participation in rising markets. The risk management strategy utilised by the Fund aims to provide investors with a smoother investment ride.”
The risk management strategy used by AUST is similar to the strategy used in BetaShares’ Australian Dividend Harvester Fund, HVST, which since its inception has grown to be one of BetaShares most popular Funds.
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